Sunday 24 August 2014

Differentiators for IT Services Providers from the perspective of Enterprise IT Buyer

As Enterprise IT Buyer, how can you differentiate IT service providers? I propose Solutions, Automation and Scale (SAS) can help here. If a IT service provider is a pure-play service provider without any solutions built based on its past experience then its service offering reduces to professional services. Nothing wrong about it. But a service provider with ready solutions can help reduce time-to-market for IT buyers. Similarly, IT service providers that use automation for delivery of its services can provide lower time-to-market for IT buyers. Last but not least is the scale parameter. While big IT service providers would bring more predictability and stability for its services, small companies would be more responsive and agile than their larger counterparts. I have seen IT buyers choosing large companies for providing IT services for core and/or mission critical components of business but choose small companies for building innovative or even experimental IT solutions.

You may wonder why I have not included cost as a differentiating factor. Yes, cost plays an important role in selection of a vendor but let it happen once you short-list few (say three) vendors based on SAS criteria. Then you can get the best value for money by choosing one of them on the basis of price that they would offer.

3 comments:

Anonymous said...

Shrikant, Very nice short & sweet writeup. You have also given right approach when to select large and stable provider and when to provide small and responsive provider. But it is an anomaly that while small providers are responsive, they seldom have capability to lead the innovation the client wants. Whereas the big players provide stable and reliable 'lights-on' services and also have capability / money power to participate in innovation. By the way, the word 'innovation' might be used misleadingly by service providers altogether.
- Mak

Shrikant Mulik said...

Yes, Mak! I agree that when it comes to operationalization of innovation, small-sized IT services providers find it difficult to provide the scale by which they can continue with their services. Either they have to grow big or leave the field for larger players! Nevertheless, small-sized companies do have a role to play to provide innovative solutions to IT user organizations.

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